4 ms·

I don't see it as an 'unfortunate outcome' - it is a great outcome because it maximises the total value of the economic pie created by the movie and TV studios.

by MarkMc 10y ago

I don't see it as an 'unfortunate outcome' - it is a great outcome because it maximises the total value of the economic pie created by the movie and TV studios. The fact that movie studios can add restrictions when distributing digital content means that they can charge a fee closer to the value that consumers receive. This means (1) the studio shareholders get larger dividends, (2) the industry makes more movies; (3) consumers who are willing to pay get a wider choice; and (4) more people are employed in the industry. In general it seems to me inefficient to have laws which prevent suppliers from charging fees close to the value they create. For example, if the government says "farmers cannot sell tomatoes for more than $2 per kilo" that would clearly restrict the total size of the 'economic pie' produced by growing tomatoes (shared between farmer and consumer). Similarly if we place restrictions on the kind of agreements that movie producers can negotiate with distributors it also limits the size of the movie industry.

hrktb 10y ago
It's not a free market industry. To follow your exemple , a tomato owner cannot license you tomatoes and come back and take away your tomato after three days, nor make a deal with you to force your user to eat your tomato only in some settings and not other, otherwise they violate the DMCA. TV and Movie owners already have copyright laws and DMCA laws giving them legal control on who gets their content and how it is used. The situation with Netflix is that now they can remove their past supply from the market to limit competition from their older titles. New content won't be better or more sought after than the older, it will just be the only one conveniently available. And as we move to more and more digital releases, there might not be any alternative way left to get the older content anymore. You are right that this will pay salaries for industry people, but I agree with the parent that it's unfortunate.
- maruhan2 10y ago
  Not a Netflix owner so I'm actually confused. Why do they worry about competition of their own titles? If you choose one thing from your selection they are still paying for your selection, isn't it?
- throwawaykf05 10y ago
  > TV and Movie owners already have copyright laws and DMCA laws giving them legal control on who gets their content and how it is used. And you have property laws giving you legal control over who gets your physical property and how it gets used. You could, for instance, loan your car to your family all you want, or agencies can rent their cars out as they wish. But the moment some stranger makes off with it, the government law enforcement agencies are obliged to help. The legal distribution of content is a free market -- there is no government price setting agency and no monopoly more than other forms of ownership -- the public only needs to be better educated about what they are paying for.
  - hrktb 10y ago
    I've been thinking about it, and perhaps the conclusion could be that the moment you start loaning, you are by definition in a special situation. I guess in the wider sense of the term it is still a market, but it doesn't behave like how we use to think about markets. With your exemple about cars for instance, if every car maker decided to refuse to sell their cars, and only accepted loaning them, they'd have a lot more control than they have now, as long as they collude to all go loaning only. They could block reselling, forbid you by contrat from using your car for specific uses (or you'd need an extra fee for professional use for instance), they could get rid of all the second hand market and force old cars to retire prematurely. You are right that we'd fall exactly in the situation we discussed with Netflix. The main issue is not digital property or not, it's basically that we have a model where there is no tranfer of property, and the producer only lends to the consumer instead of outright selling. As it was said in another comment, Netflix could own the physical DVD while now they only rent the digital copies.
norswap 10y ago
So in summary: it's great because it makes more money. The implication that this leads to a better movie offering is dubious. Would you say better movies are coming out now than 10/20 years ago? Even if more movies are coming (which I would find very easy to believe), I doubt (as in: I'd need to see some evidence) it's a consequence of digital distribution rights. The tomato example is also bogus. Yes it's inefficient if this restriction does not have a raison d'être. But (completely) free markets do not magically create a societal optimal.

by MarkMc 10y ago

hrktb 10y ago

It's not a free market industry. To follow your exemple , a tomato owner cannot license you tomatoes and come back and take away your tomato after three days, nor make a deal with you to force your user to eat your tomato only in some settings and not other, otherwise they violate the DMCA. TV and Movie owners already have copyright laws and DMCA laws giving them legal control on who gets their content and how it is used. The situation with Netflix is that now they can remove their past supply from the market to limit competition from their older titles. New content won't be better or more sought after than the older, it will just be the only one conveniently available. And as we move to more and more digital releases, there might not be any alternative way left to get the older content anymore. You are right that this will pay salaries for industry people, but I agree with the parent that it's unfortunate.

maruhan2 10y ago
Not a Netflix owner so I'm actually confused. Why do they worry about competition of their own titles? If you choose one thing from your selection they are still paying for your selection, isn't it?
throwawaykf05 10y ago
> TV and Movie owners already have copyright laws and DMCA laws giving them legal control on who gets their content and how it is used. And you have property laws giving you legal control over who gets your physical property and how it gets used. You could, for instance, loan your car to your family all you want, or agencies can rent their cars out as they wish. But the moment some stranger makes off with it, the government law enforcement agencies are obliged to help. The legal distribution of content is a free market -- there is no government price setting agency and no monopoly more than other forms of ownership -- the public only needs to be better educated about what they are paying for.
- hrktb 10y ago
  I've been thinking about it, and perhaps the conclusion could be that the moment you start loaning, you are by definition in a special situation. I guess in the wider sense of the term it is still a market, but it doesn't behave like how we use to think about markets. With your exemple about cars for instance, if every car maker decided to refuse to sell their cars, and only accepted loaning them, they'd have a lot more control than they have now, as long as they collude to all go loaning only. They could block reselling, forbid you by contrat from using your car for specific uses (or you'd need an extra fee for professional use for instance), they could get rid of all the second hand market and force old cars to retire prematurely. You are right that we'd fall exactly in the situation we discussed with Netflix. The main issue is not digital property or not, it's basically that we have a model where there is no tranfer of property, and the producer only lends to the consumer instead of outright selling. As it was said in another comment, Netflix could own the physical DVD while now they only rent the digital copies.

norswap 10y ago

So in summary: it's great because it makes more money. The implication that this leads to a better movie offering is dubious. Would you say better movies are coming out now than 10/20 years ago? Even if more movies are coming (which I would find very easy to believe), I doubt (as in: I'd need to see some evidence) it's a consequence of digital distribution rights. The tomato example is also bogus. Yes it's inefficient if this restriction does not have a raison d'être. But (completely) free markets do not magically create a societal optimal.